Earlier today, the Internal Revenue Service published in the Federal Register final regulations under Section 162(m) of the Internal Revenue Code (the "Code"). Code Section 162(m) limits the ability of public corporations to deduct compensation paid to any covered employee to the extent that such compensation exceeds $1,000,000 in any taxable year. For purposes of this rule, a public company's "covered employees" generally include the company's named executive officers (other than the company's chief financial officer) as reported to the company's shareholders under the Securities Exchange Act of 1934.Code Section 162(m)(4)(C) provides an exception from the $1,000,000 deduction limit for "performance-based" compensation that meets the requirem
Client Alert | March 31, 2015
London partner Selina Sagayam and associate Amar Madhani are authors of 'Shareholder Activism – The European Dimension “En Garde”' published March 30, 2015 by LexisNexis Corporate Law.
Article | March 30, 2015
On March 24, 2015, the Supreme Court of the United States issued its long-awaited decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 575 U.S.
Client Alert | March 25, 2015
In private company transactions, dealmakers often spend significant amounts of time talking about how to treat the cash held by an acquisition target. For example, if the buyer and the seller are negotiating price on the assumption that the target will be sold on a cash-free, debt-free basis, how does the purchase price get adjusted for cash that the target continues to hold at the time of closing? If the deal includes a working capital adjustment, how will cash and cash equivalents be taken into account? What are the procedures for measuring how much cash the target holds at closing? In cross-border deals, the issues about how to deal with target cash often become significantly more complex. Businesses that operate around the world may have cash in seve
Client Alert | March 16, 2015
London partner James Barabas and associate Tony Downes are authors of "Have sympathy for the devils" [PDF] published in the March 2015 issue of International Financial Law Review.
Article | March 10, 2015
Orange County partner James Moloney, New York partner Glenn Pollner and Orange County associate Cem Surmeli are authors of "Five Day Tender Offers: What Can Market Participants Expect?" [PDF] published in the March-April 2015 issue of Deal Lawyers.
Article | March 2, 2015
Orange County partner James Moloney, San Francisco associates Sean Sullivan and Todd Trattner are authors of "Five Day Tender Offers: Conditions and Timelines" [PDF] published in the March-April 2015 issue of Deal Lawyers.
Article | March 2, 2015
Los Angeles associate Daniela Stolman, Orange County associate Mike Titera and Palo Alto associate Linda Dang are the authors of "Inside the SEC" [PDF] published in the February 2015 issue of Insights.
Article | February 24, 2015
Concerns about cybersecurity and data privacy have exploded into the public consciousness in recent years, accompanied by a host of new and rapidly developing legal issues.
Client Alert | February 17, 2015
On February 4, 2015, the New York Department of Financial Services released revisions to its groundbreaking virtual currency regulatory framework commonly referred to as the "BitLicense."
Client Alert | February 11, 2015
On January 15, 2015, the Securities and Exchange Board of India, the securities market regulator in India ("SEBI"), announced the Securities and Exchange Board of India (Prohibition of Insider Trading Regulations) 2015 ("2015 Regulations").
Client Alert | February 11, 2015
With preparations for the 2015 proxy season in full swing at U.S.
Client Alert | February 6, 2015
Spin-off transactions require a focused, intensive planning effort. The deal team must make decisions about how best to allocate businesses, assets and liabilities between the parent and the subsidiary that will be spun-off. It must address complex tax issues, securities law questions and accounting matters, as well as issues related to capital structure, financing and personnel matters. In addition, it must resolve a long list of governance issues, including questions about the composition of the spin-off company board, the importance of mechanisms for dealing with conflicts of interest and the desirability of robust takeover defenses. Transaction planners do not always give the governance issues high priority. They may assume that the spin-off company can si
Client Alert | February 5, 2015
On January 23, 2015, the Division of Corporation Finance of the SEC issued a no-action letter permitting issuers (or their parents or wholly-owned subsidiaries) to conduct five business day tender offers for any and all non-convertible debt securities when certain conditions were met.
Client Alert | February 3, 2015
Gibson, Dunn & Crutcher LLP is pleased to present its first year-end Activism Update reviewing shareholder activism involving U.S. public companies during 2014.
Client Alert | January 30, 2015
Washington, D.C. partner Judith Lee, New York partner Arthur S. Long, Los Angeles partner Marcellus McRae, Washington D.C. counsel Jeffrey L. Steiner and associate Stephenie Gosnell Handler are the authors of "Bitcoin Basics: a Primer on Virtual Currencies" [PDF] published in the January issue of the Business Law International.
Article | January 30, 2015
The extraordinary events of the past year, from international cybersecurity breaches to significant economic and trade sanction developments, emphasize the expansive array of challenges facing today’s compliance professionals.
Webcasts | January 27, 2015
The Paris office of Gibson Dunn is pleased to provide this legal and regulatory update covering France for the second semester of 2014.
Client Alert | January 23, 2015
On January 12, 2015, the United States Court of Appeals for the Second Circuit issued an unprecedented decision holding that a company's failure to disclose a known trend or uncertainty in its Form 10-Q filings, as required by Item 303 of SEC Regulation S-K, can give rise to liability under Section 10(b) of the Securities Exchange Act of 1934.
Client Alert | January 22, 2015
Shareholder activism continues to dominate the corporate landscape and attract daily headlines in the financial press. And, as the pace of activism accelerates in 2015, a number of legal battles over the last two years between companies and activists has put in the spotlight the permissible scope and function of advance notice bylaws--a term that we broadly define for these purposes to cover bylaw provisions establishing timing, procedural and informational requirements for shareholders seeking to present director nominations and other business proposals to a shareholder vote.
Client Alert | January 22, 2015
THE BACKDROPIn May 2014, Pfizer Inc. made certain voluntary public statements in connection with its possible public takeover offer for AstraZeneca plc.
Client Alert | January 21, 2015
The close of 2014 saw the SEC's Division of Enforcement take a victory lap. Following the release of the statistics for the fiscal year ended September 30, Division Director Andrew Ceresney touted a few records -- the largest number of enforcement actions brought in a single year (755); the largest total value of monetary sanctions awarded to the agency (over $4 billion); the largest number of cases taken to trial in recent history (30).
Client Alert | January 12, 2015
The past year marked the 25th anniversary of the fall of the Berlin Wall and probably the end of a European dream to continue to entertain smooth and peaceful cooperation with Russia.
Client Alert | January 9, 2015
The pace of regulation and enforcement actions relating to virtual currencies has continued to pick up during the fall of 2014.
Client Alert | January 5, 2015
On December 19, 2014, the Delaware Supreme Court issued a ruling reversing an order of the Court of Chancery granting a preliminary injunction that would have enjoined an agreed-to merger and required a mandatory post-signing 30-day go-shop period. In C&J Energy Services, Inc. v.
Client Alert | December 22, 2014
On December 10, 2014, the United States Court of Appeals for the Second Circuit issued its much-anticipated decision in United States v. Newman, which vacated the convictions of and dismissed with prejudice the indictments against two high-profile insider trading defendants--Anthony Chiasson and Todd Newman. In overturning their convictions the Second Circuit both clarified the heavy evidentiary burden needed to convict downstream tippees who are several levels removed from the original tipper, and returned life to the "personal benefit" test for when a tipper breaches a fiduciary duty. This ruling likely will have significant repercussions for criminal and civil insider trading cases in the Second Circuit. The Trial and ConvictionsChiasson and Newman were succe
Client Alert | December 15, 2014
As companies prepare for the second year of filings under the Securities and Exchange Commission's ("SEC") new conflict minerals rule, many companies are looking for guidance from the first annual filings, which were due June 2, 2014. As expected, the inaugural Form SD and conflict minerals report filings reflect diverse approaches to the new compliance and disclosure requirements. We offer below some observations based on the first round of conflict minerals filings for companies to consider as they address their compliance programs and disclosures for the 2014 calendar year. It is important to note, however, that the shape of future compliance and reporting obligations will be impacted by the outcome of the pending litigation challenging the conflict mine
Client Alert | December 5, 2014
IntroductionFollowing the adoption of the Sarbanes-Oxley Act on July 30, 2002, companies publicly listed on US stock markets have to implement -- including in their foreign subsidiaries -- internal control mechanisms, such as whistleblowing procedures, in order to prevent malpractice, mismanagement or misconduct.French law has imposed strict conditions on the implementation of such whistleblowing procedures in France.
Client Alert | December 3, 2014
Twenty months after proposing regulations to minimize incidents of disruptive trading and potentially catastrophic trading malfunctions, the SEC, on November 19, 2014, adopted Regulation Systems Compliance and Integrity ("Regulation SCI") to enhance confidence in U.S.
Client Alert | November 25, 2014
Gibson Dunn partner Joel M. Cohen and associates Mary Kay Dunning, Darcy Harris and Genevieve Quinn are the authors of the following article published in a recent issue of the Review of Securities & Commodities Regulation. The team, who represented Nelson Obus in SEC v.
Client Alert | November 20, 2014
M&A practitioners are well aware of the several standards of review applied by Delaware courts in evaluating whether directors have complied with their fiduciary duties in the context of M&A transactions.
Client Alert | November 18, 2014
Orange County partner James Moloney and associates Mike Titera and Kevin Hill are the authors of "What's the Big Deal? Why Some Seemingly Material Acquisition Agreements Might Never See the Light of Day" [PDF] published in the November-December 2014 issue of Deal Lawyers.
Client Alert | November 17, 2014
In response to a string of publicly disclosed cyberattacks against financial institutions in recent months, New York and federal regulators are pushing the financial sector to better protect itself and, notably, are seeking additional information about banks' cybersecurity efforts. Benjamin Lawsky, the Superintendent of the New York State Department of Financial Services ("DFS") has been at the forefront of this increased regulatory focus. New York StateOn October 21, 2014, Superintendent Lawsky reportedly sent a letter to dozens of banks that not only urges them to address the cybersecurity of their third-party service providers but also requests detailed information about their cybersecurity practices. Noting that "a firm's level of cybersecurity is only
Client Alert | October 27, 2014
San Francisco partner Marc Fagel, Washington, DC partners Elizabeth Ising and Ronald Mueller and Orange County partner James Moloney are the authors of "SEC Enforcement Actions over Stock Transaction Reporting Obligations Offer Reminders for Public Companies and Their Insiders" [PDF] published in the October, 2014 issue of Insights.
Client Alert | October 1, 2014
On September 10, 2014, the Securities and Exchange Commission announced an unprecedented enforcement sweep against 34 companies and individuals for alleged failures to timely file with the SEC various Section 16(a) filings (Forms 3, 4 and 5) and Schedules 13D and 13G (the "September 10 actions").
Client Alert | September 11, 2014
On July 21, 2014, the New York Department of Financial Services ("NYDFS") released a groundbreaking virtual currency regulatory framework, becoming the first state to issue comprehensive rules tailored to virtual currency businesses. The proposed framework, which has become commonly known as the "BitLicense," was the long-anticipated product of nearly a year of public hearings and other inquiries. Initially slated for a 45-day public comment period, the comment period was recently extended to October 21, 2014. This client alert provides detailed information on the scope of the proposed regulation, and discusses potential implications for the virtual currency industry.What are Virtual Currencies?Virtual currencies are digital representations of val
Client Alert | September 10, 2014
On August 15, 2014, the U.S. Court of Appeals for the Second Circuit issued a ruling limiting the extraterritorial application of Section 10(b) of the Securities Exchange Act of 1934 in the wake of the Supreme Court's landmark opinion in Morrison v. National Australia Bank Ltd.
Client Alert | August 25, 2014
Gibson Dunn partner Eduardo Gallardo and associate Andrew Kaplan are the authors of "Board of Directors Duty of Oversight and Cybersecurity" published in the August 20, 2014, issue of the Delaware Business Court Insider. © 2014, Delaware Business Court Insider, August 20, 2014. Reprinted with permission from ALM Media Properties, LLC.
Client Alert | August 20, 2014
In two recent decisions written by Vice Chancellor Travis Laster, the Delaware Court of Chancery provided helpful judicial guidance on the application of the covenant of good faith in the context of related party transactions involving master limited partnerships (MLPs). In both decisions, the Court made clear that when dealing with limited partnerships, contractual terms control and that, once fiduciary duties are contractually eliminated as permitted by Delaware law, courts should not imply terms that would alter the contract or attempt to reconstruct outcomes that fiduciary duty analysis in the corporate setting would generate.An MLP is a publicly traded limited partnership with qualifying assets that is treated as a pass-through entity for federal income tax purposes.
Client Alert | August 11, 2014
Washington, D.C. partner Michael Diamant is the author of “Learning the Hard Way: Ethics and Compliance Program Lessons Gleaned From Recent U.S. Resolution Agreements” [PDF] published in the August 8, 2014 issue of Bloomberg BNA’s Corporate Law & Accountability Report. Reproduced with permission from Corporate Accountability Report, 12 CARE 32, 08/08/2014.
Client Alert | August 8, 2014
As regulators implement Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), much of what was left vague in the statute is coming into focus.
Client Alert | July 29, 2014
While the first year of President Hollande's mandate has been focused on societal reforms (same-sex marriage, immigration, justice, reform of school timetables), his New Year's Address confirmed that the Government's efforts should concentrate on employment and growth for 2014. Pledges to cut public spending, reduce labor costs for businesses and lower taxes have been made.The current Administration is trying to place greater emphasis on social negotiation, which has been the case notably with the "responsibility pact" for business, entered into with French employers' associations. At the same time, faced with the duty to deal with certain controversial public debates, the French Administration has been pressed, in certain circumstances, to take urgent legislation (as
Client Alert | July 22, 2014
Washington, D.C. partner Mark Perry and Palo Alto partner Jonathan Dickey are the authors of "Eight Propositions Regarding the Scope of Halliburton II" [PDF] published in the July 21, 2014 issue of Bloomberg BNA's Securities Regulation & Law Report.Reproduced with permission from Securities Regulation & Law Report, 46 SRLR 1403, 07/21/2014.
Client Alert | July 21, 2014
On June 25, 2014, the UK Government published the Small Business, Enterprise and Employment Bill which, among other things, proposes that all UK companies (other than publicly traded companies reporting under the Disclosure and Transparency Rules (DTR5)) be required to maintain a register of people who have significant control over the company.
Client Alert | July 17, 2014
It almost goes without saying that the first half of 2014 brought with it the most significant development in securities litigation in decades: the U.S.
Client Alert | July 15, 2014
Our mid-year report one year ago presented an exciting opportunity to discuss a time of great change at the SEC. A new Chair and a new Director of Enforcement had recently assumed the reins and begun making bold policy pronouncements.
Client Alert | July 14, 2014
On June 30, 2014, the staff of the Securities and Exchange Commission's (the "Commission") Division of Investment Management and Division of Corporation Finance (the "Staff") issued much-anticipated guidance regarding proxy advisory firms, in the form of 13 Questions and Answers. Published in Staff Legal Bulletin No. 20 ("SLB 20"), available at http://www.sec.gov/interps/legal/cfslb20.htm, the Staff's guidance addresses both (1) investment advisers' responsibilities in voting client proxies and retaining proxy advisory firms (Questions 1-5), and (2) the availability and requirements of two exemptions to the proxy rules often relied upon by proxy advisory firms (Questions 6-13).SLB 20 includes an acknowledgement that investment advisers and proxy adv
Client Alert | July 1, 2014
This alert provides an overview of shareholder proposals submitted to public companies during the 2014 proxy season, including statistics, notable decisions from the staff (the "Staff") of the Securities and Exchange Commission (the "SEC") on no-action requests and information about litigation regarding shareholder proposals.
Client Alert | June 25, 2014
Munich partner Philip Martinius is author of “The Revival of Delisting” [PDF] published in the Business Law Magazine. The article deals with practical issues after German Federal Court of Justice dropped cumbersome restrictions.
Client Alert | June 24, 2014
New York partner Andrew Fabens and San Francisco associate Sean Sullivan are the authors of "Practical Strategies for Effective Management of Earnings Calls" [PDF] published in the June 2014 issue of Insights.
Article | June 2, 2014